NSW home approvals go through the floor: September figures

05 November 2008

Todays Australian Bureau of Statistics (ABS) figures reveal a massive drop in NSW home approvals, according to the Urban Taskforce.

Across Australia, the seasonally adjusted estimate for new home approvals fell 7.2 per cent in September following a fall of 3.4 per cent in August.


However, home approvals in NSW fell by 26.4 per cent, along with a 3.7 per cent fall in Victoria. In contrast, Queensland home increased by 3 per cent.


In September the number of houses approved in NSW fell by 7.9 per cent. Approvals for apartments and townhouses plummeted by 48.1 per cent.


The Taskforces chief executive, Aaron Gadiel, said that less NSW home approvals were issued in September than in any other month since the ABS began keeping records in 1983.


It is almost impossible to believe, but NSW housing development is collapsing even further, Mr Gadiel said In the last six months NSW home approvals have fallen by 39 per cent.


In the same period Victorian approvals fell by only 2.4 per cent, although in Queensland they have fallen by 4.5 per cent.


In NSW anti-development sentiment and higher developments costs has meant a more rapid fall-off in investment than in other states, Mr Gadiel said.


In the first three months of this financial year (July September 2008) the value of new residential building approvals was 9 per cent lower than in the same period last year ($2.1 billion compared with $2.3 billion).


The apartment and town house sector has taken the biggest blow with a 30 per cent decline in the value of approved projects ($519 million compared to $742 million).


The value of approved non-residential building has also been hit hard 26 per cent lower in the first three months of this financial year compared to the same period last year ($3.5 billion to $4.1 billion).


Without a strong supply of new housing, rents will continue to sky rocket and first home buyers will struggle even more to save a deposit for a home of their own, Mr Gadiel said.


The Department of Housings figures show that Sydney had an 18 per cent increase in rents for three bedroom homes and a 15 per cent increase for two bedroom apartments in the last financial year.


Mr Gadiel said the development industry was a key employer that NSW couldnt do without.


Each year property development creates 709,000 direct jobs across Australia, Mr Gadiel said.


Mr Gadiel said that in recent days the NSW Government had taken some welcome steps to restore industry confidence in the state, but much more needed to be done.


In next weeks mini-budget the NSW Government should waive its development levies of up to $50,000 a new home, and force local councils to lower and cap their additional levy which can also be as much as $50,000 a home, Mr Gadiel said.


The announcement last week of a new $3 million program to manage major developments and rezonings will help, but more must be done to overcome systematic problems in the local planning system.


There should be strict time limits for local planning decisions nothing should take longer than 90 days to be sorted out.


Developments of more than $5 million in value should be handled by expert panels, rather than local politicians.


This is consistent with recommendations of the Independent Commission Against Corruption who wanted a stronger role for panels to make development decisions instead of councilors.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


All home approvals figures cited are in seasonally adjusted terms.



Download PDF Version